QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-12477

AMGEN INC.

(Exact name of registrant as specified in its charter)

Delaware

95-3540776

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

One Amgen Center Drive, Thousand Oaks, California

91320-1799

(Address of principal executive offices)

(Zip Code)

Registrants telephone number, including area code

(805) 447-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated
filer. x

As of July 18, 2003, the registrant had 1,290,780,772 shares of common stock, $0.0001 par value, outstanding.

The information in this report for the three and six months ended June 30, 2003 and 2002 is unaudited but includes all adjustments (consisting only of normal recurring accruals, unless otherwise indicated) which Amgen Inc., including its
subsidiaries, (Amgen or the Company) considers necessary for a fair presentation of the results of operations for those periods.

The condensed consolidated financial statements should be read in conjunction with the Companys financial statements and the notes thereto contained
in the Companys Annual Report on Form 10-K for the year ended December 31, 2002.

Interim results are not necessarily indicative of results for future quarters or the full fiscal year.

Amgen Inc., including its subsidiaries, (Amgen or the
Company) is a global biotechnology company that discovers, develops, manufactures, and markets human therapeutics based on advances in cellular and molecular biology.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as well as affiliated companies in which
the Company has a controlling financial interest and exercises control over their operations (majority controlled affiliates). All material intercompany transactions and balances have been eliminated in consolidation. Investments in
affiliated companies which are 50% or less owned and where the Company exercises significant influence over operations are accounted for using the equity method. All other equity investments are accounted for under the cost method. The caption
Earnings of affiliates, net includes Amgens equity in the operating results of affiliated companies and the minority interest others hold in the operating results of Amgens majority controlled affiliates. On July 15, 2002,
the Company completed its acquisition of Immunex Corporation (Immunex) (see Note 3, Immunex acquisition). In accordance with Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, Amgen has included in its results of operations for the three and six months ended June 30, 2003, the results of operations of Immunex.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined in a manner which approximates the first-in, first-out (FIFO) method.
Inventories consist of raw materials, work in process, and finished goods for currently marketed products. Inventories are shown net of applicable reserves and allowances. Inventories consisted of the following (in millions):

June 30,

2003

December 31,

2002

Raw materials

$

95.9

$

76.9

Work in process

402.1

360.0

Finished goods

140.7

108.0

$

638.7

$

544.9

Intangible assets
and goodwill

Intangible assets are recorded at cost, less
accumulated amortization. Amortization of intangible assets is provided over their estimated useful lives ranging from 7 to 15 years on a straight-line basis (weighted average amortization period of 14.7 years at June 30, 2003). As of June 30, 2003

and December 31, 2002, accumulated amortization of intangible assets amounted to $338.9 million and $165.8 million, respectively. Intangible assets primarily
consist of acquired product technology rights, which relate to the identifiable intangible assets acquired in connection with the Immunex acquisition (see Note 3, Immunex acquisition). Amortization of acquired product technology rights
is included in Amortization of acquired intangible assets in the accompanying condensed consolidated statements of operations. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill, which primarily
relates to the Immunex acquisition, is no longer amortized, but is subject to periodic impairment tests.

The Company has the exclusive right to sell
Epoetin alfa for dialysis, certain diagnostics and all non-human, non-research uses in the United States. The Company sells Epoetin alfa under the brand name EPOGEN®. Amgen has granted to Ortho Pharmaceutical Corporation (which has assigned its rights under the product license
agreement to Ortho Biotech Products, L.P.), a subsidiary of Johnson & Johnson (Johnson & Johnson), a license relating to Epoetin alfa for sales in the United States for all human uses except dialysis and diagnostics. The license
agreement, which is perpetual, can be terminated upon mutual agreement of the parties, or default. Pursuant to this license, the Company and Johnson & Johnson are required to compensate each other for Epoetin alfa sales that either party makes
into the other partys exclusive market, sometimes referred to as spillover. Accordingly, Amgen does not recognize product sales it makes into the exclusive market of Johnson & Johnson and does recognize the product sales made
by Johnson & Johnson into Amgens exclusive market. Sales in Amgens exclusive market are derived from the Companys sales to its customers, as adjusted for spillover. The Company is employing an arbitrated audit methodology to
measure each partys spillover based on estimates of and subsequent adjustments thereto of third-party data on shipments to end users and their usage.

Sales of the Companys other products are recognized when shipped and title has passed. Product sales are recorded net of reserves for estimated
discounts, returns, incentives, and rebates.

Royalty income

Royalties from licensees are based on third-party sales
of licensed products and are recorded in accordance with contract terms when third-party results are reliably measurable and collectibility is reasonably assured. Royalty estimates are made in advance of amounts collected using historical and
forecasted trends. Pursuant to the license agreement with Johnson & Johnson, noted above, the Company earns a 10% royalty on sales of Epoetin alfa by Johnson & Johnson in the United States.

Corporate partner revenues

Corporate partner revenues are primarily comprised of amounts earned from
Kirin-Amgen, Inc. (Kirin-Amgen) for certain research and development (R&D) activities and are generally earned as the R&D activities are performed and the amounts become due. In addition, corporate partner revenues
include license fees and milestone payments associated with collaborations with

third parties. Revenue from non-refundable, upfront license fees where the Company has continuing involvement is recognized ratably over the development or
agreement period. Revenue associated with performance milestones is recognized based upon the achievement of the milestones, as defined in the respective agreements. The Companys collaboration agreements with third parties are performed on a
best efforts basis with no guarantee of either technological or commercial success.

Research and development costs

Research and development expenses are comprised of the following types of costs incurred in performing R&D activities: salaries and benefits,
allocated overhead and occupancy costs, clinical trial and related clinical manufacturing costs, contract services, and other outside costs. Research and development expenses also include such costs related to activities performed on behalf of
corporate partners. Research and development costs are expensed as incurred.

Earnings per share

Basic earnings per share is based upon the weighted-average number of common shares outstanding. Diluted earnings per share is based upon the weighted-average number of common shares and dilutive potential common shares outstanding.
Potential common shares are: 1) outstanding options under the Companys employee stock option plans including stock option plans assumed from Immunex, 2) potential issuances of stock under the employee stock purchase plans including employee
stock purchase plans assumed from Immunex, 3) restricted stock (collectively Dilutive Securities which are included under the treasury stock method when dilutive), and 4) common shares to be issued under the assumed conversion of
outstanding 30-year, zero-coupon senior convertible notes (see Note 6, Debt) which are included under the if-converted method when dilutive.

The following table sets forth the computation for basic and diluted earnings per share (in millions, except per share information):

The Company accounts for
its employee stock option and stock purchase plans under the recognition and measurement principles of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and related Interpretations.
Under APB No. 25, no stock-based compensation is reflected in net income, as all options granted under the plans had an exercise price equal to the market value of the underlying common stock on the date of grant and the related number of shares
granted is fixed at that point in time. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation:

The fair value of the
options was estimated at the date of grant using a Black-Scholes option valuation model with the following weighted-average assumptions for the three months ended June 30, 2003 and 2002, respectively: 1) a risk-free interest rate of 1.9% and 3.5%,
2) a dividend yield of 0% and 0%, 3) a volatility factor of the expected market price of the Companys common stock of 50% and 50%, and 4) an expected life of the options of 3.7 years and 3.6 years. These assumptions resulted in
weighted-average fair values of $24.10 and $19.55 per share for employee stock options granted during the three months ended June 30, 2003 and 2002, respectively.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options. The
Companys employee stock options have characteristics significantly different from those of traded options such as extremely limited transferability and, in most cases, vesting restrictions. In addition, the assumptions used in option valuation
models (see above) are highly subjective, particularly the expected stock price volatility of the underlying stock. Because changes in these subjective input assumptions can materially affect the fair value estimate, in managements opinion,
existing valuation models do not provide a reliable, single measure of the fair value of its employee stock options. For purposes of pro forma disclosures, the estimated fair values of the options are amortized over the options vesting
periods.

Use of estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those
estimates.

Recent accounting pronouncements

In May 2003, the Financial Accounting Standards Board (FASB)
issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (SFAS No. 149), effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated
after June 30, 2003. This rule amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, to provide more consistent reporting of contracts

as either derivatives or hybrid instruments. The impact upon adoption of SFAS No. 149 is not expected to have a material impact on the results of operations
or the financial position of the Company.

In May 2003, the
FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS No. 150), effective for financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The impact upon adoption of SFAS No. 150 is not expected to have a material impact on the results of operations or the financial position of the
Company.

In January 2003, the FASB issued FASB Interpretation
No. 46, Consolidation of Variable Interest Entities (FIN 46), which is effective for the Company on July 1, 2003. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entitys activities or entitled to receive a majority of the entitys residual returns or both. The impact upon adoption of FIN 46 is being currently evaluated, but the Company
expects that its adoption will not have a material impact on the results of operations or the financial position of the Company.

Basis of presentation

The financial information for the three and six months ended June 30, 2003 and 2002 is unaudited but includes all adjustments (consisting only of normal
recurring accruals, unless otherwise indicated) which the Company considers necessary for a fair presentation of the results of operations for these periods. Interim results are not necessarily indicative of results for the full fiscal year.

Reclassification

Certain prior year amounts have been reclassified to conform to the current
year presentation.

2. Related party transactions

The Company owns a 50% interest in Kirin-Amgen, a corporation formed in 1984
with Kirin Brewery Company, Limited (Kirin) for the development and commercialization of certain products based on advanced biotechnology. Kirin-Amgen has given exclusive licenses to Amgen to manufacture and market certain products
including erythropoietin, granulocyte colony-stimulating factor (G-CSF), darbepoetin alfa, and pegfilgrastim in certain geographic areas of the world. The Company currently markets certain of these products under the brand names
EPOGEN® (erythropoietin), NEUPOGEN® (G-CSF), Aranesp® (darbepoetin alfa), and NeulastaTM (pegfilgrastim). Kirin-Amgens revenues primarily consist of royalty income related to its licensed technology rights. Kirin-Amgen receives royalty
income from Amgen, as well as Kirin, Johnson & Johnson, F. Hoffmann-La Roche Ltd, and others under separate product license agreements for certain geographic areas outside of the United States. During the three and six months ended June 30,
2003, Kirin-Amgen earned royalties from Amgen of $54.6 million and $99.9 million, respectively. During the three and six months ended June 30, 2002, Kirin-Amgen earned royalties from Amgen of

$39.1 million and $74.3 million, respectively. These amounts are included in Cost of sales in the accompanying condensed consolidated statements
of operations.

Kirin-Amgens expenses primarily consist
of costs related to research and development activities conducted on its behalf by Amgen and Kirin. Kirin-Amgen pays Amgen and Kirin for such services at negotiated rates. During the three and six months ended June 30, 2003, Amgen earned revenues
from Kirin-Amgen of $21.7 million and $48.0 million, respectively, for certain research and development activities performed on Kirin-Amgens behalf. During the three and six months ended June 30, 2002, Amgen earned revenues from Kirin-Amgen of
$44.9 million and $70.1 million, respectively. These amounts are included in Corporate partner revenues in the accompanying condensed consolidated statements of operations.

3. Immunex acquisition

On July 15, 2002, the Company acquired all of the outstanding common stock of Immunex in a transaction accounted for as a business combination. Immunex
was a leading biotechnology company dedicated to developing immune system science to protect human health. The results of Immunexs operations have been included in the condensed consolidated financial statements commencing July 16, 2002. The
acquisition is expected to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

The purchase price of the acquisition was (in millions):

Fair value of Amgen shares issued (244.6 shares)

$

14,313.0

Cash consideration

2,526.2

Fair value of Amgen options issued (22.4 options)

870.2

Transaction costs

62.4

Total

$

17,771.8

Purchase price
allocation

The purchase price was allocated to the
tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The allocation of the purchase price was based, in part, on third-party valuations of the fair values of
in-process research and development, identifiable intangible assets, and certain property, plant, and equipment. The excess of the purchase price over the fair values of assets and liabilities acquired amounted to $9,775.3 million and was allocated
to goodwill. The Company expects that substantially all of the amount allocated to goodwill will not be deductible for tax purposes.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in millions):

Approximately $2,991.8 million of the
purchase price represents the estimated fair value of projects that, as of the acquisition date, had not reached technological feasibility and had no alternative future use. Accordingly, this amount was immediately expensed in the consolidated
statement of operations during the three months ended September 30, 2002.

Leukine® and
Novantrone®

In May 2002, Immunex entered into an agreement to sell certain assets used
in connection with its Leukine® business to
Schering AG Germany (Schering) for approximately $389.9 million in cash plus the payment of additional cash consideration upon achievement of certain milestones. The sale of the Leukine® business was pursued in connection with Amgens acquisition of Immunex and was
completed on July 17, 2002.

In December 2002, the Company
licensed the commercialization rights for Novantrone® in the United States to Serono S.A. for royalties based on future product sales.

Pro forma results of operations

The following unaudited pro forma information for the three and six months ended June 30, 2002 presents a summary of the Companys consolidated
results of operations as if the Immunex acquisition had taken place at the beginning of 2002 (in millions, except per share information):

The pro forma net
income and earnings per share for the three and six months ended June 30, 2002 exclude the acquired IPR&D charge noted above. The pro forma information is not necessarily indicative of results that would have occurred had the acquisition been in
effect for the periods presented or indicative of results that may be achieved in the future.

The impact of the Leukine® sale noted above is reflected in the Companys purchase price allocation as of July 15, 2002. However, for antitrust reasons, information regarding the results of operations attributable to Leukine® is not reviewable by Amgen, and therefore, has not been
excluded from the pro forma results of operations for the three and six months ended June 30, 2002. Leukine® sales for the three and six months ended June 30, 2002 were $30.0 million and $58.6 million, respectively.

Restructuring plans

In connection with the Immunex acquisition, the Company initiated an integration plan to consolidate and restructure certain functions and operations of
the pre-acquisition Immunex primarily consisting of the termination and relocation of certain Immunex personnel and consolidation of certain Immunex leased facilities. These costs have been recognized as liabilities assumed in the purchase business
combination in accordance with Emerging Issues Task Force (EITF) Issue No. 95-3 Recognition of Liabilities in Connection with Purchase Business Combinations and reflected as an increase to goodwill. The following table
summarizes the liabilities established as a result of the acquisition and payments made through June 30, 2003 (in millions):

Balance at

12/31/02

Adjustments

Payments

Balance at

6/30/03

Employee related benefits

$

24.1

$

0.8

$

(15.3

)

$

9.6

Facility consolidation

30.8



(2.1

)

28.7

Total

$

54.9

$

0.8

$

(17.4

)

$

38.3

4. Stockholders equity

Stock repurchase program

The Company has a stock repurchase program primarily to reduce the dilutive
effect of its employee stock option and stock purchase plans. Stock repurchased under the program is intended

to be retired. During the six months ended June 30, 2003, the Company repurchased 15.5 million shares of its common stock at a total cost of $899.6 million.
In June 2002, the Board of Directors authorized the Company to repurchase up to an additional $2.0 billion of common stock through June 30, 2004. At the time of the additional authorization, the Company had approximately $257.1 million remaining
under the previous authorized stock repurchase program. The amount the Company spends on and the number of shares repurchased varies based on a variety of factors, including the stock price and blackout periods in which the Company is restricted
from repurchasing shares. As of June 30, 2003, $942.5 million was available for stock repurchases through June 30, 2004.

Other comprehensive income

SFAS No. 130, Reporting Comprehensive Income, requires unrealized gains and losses on the Companys available-for-sale securities and
foreign currency forward contracts which qualify and are designated as cash flow hedges, and foreign currency translation adjustments to be included in other comprehensive income. During the three and six months ended June 30, 2003, total
comprehensive income was $646.9 million and $1,117.4 million, respectively. During the three and six months ended June 30, 2002, total comprehensive income was $405.6 million and $721.5 million, respectively.

5. Income taxes

The tax rate for the three and six months ended June 30, 2003 is different from the statutory rate primarily as a result of
permanently reinvested earnings of the Companys foreign operations. The Company does not provide for U.S. income taxes on undistributed earnings of its foreign operations that are intended to be permanently reinvested.

The Companys income tax returns are routinely audited by the Internal
Revenue Service and various state tax authorities. While disputes may arise with these tax authorities, some of which may be significant, the Company believes that adequate tax liabilities have been established for all open audit years.

6. Debt

Commercial Paper

The Company has a commercial paper program which provides for unsecured, short-term borrowings up to an aggregate of $200 million. At December 31, 2002,
commercial paper with a face amount of $100 million was outstanding. These borrowings had maturities of less than one month and had effective interest rates averaging 1.4%. The Company paid off all amounts outstanding under its commercial paper
program during the three months ended March 31, 2003.

Convertible Notes

On March 1, 2002, the
Company issued $3.95 billion in aggregate face amount at maturity ($1,000 face amount per note) of 30-year, zero-coupon senior convertible notes (the Convertible

Notes) with a yield to maturity of 1.125%. The gross proceeds from the offering were approximately $2.82 billion (a $714.23 per note original issue
price). The original issue discount of $1.13 billion (or $285.77 per note) is being accreted to the balance of the Convertible Notes and recognized as interest expense over the life of the Convertible Notes using the effective interest method. Debt
issuance costs were approximately $56.5 million and are being amortized on a straight-line basis over the life of the notes.

Holders of the Convertible Notes may convert each of their notes into 8.8601 shares of common stock of the Company (the conversion rate) at
any time on or before the maturity date, or approximately 35.0 million shares in the aggregate. The conversion price per share at issuance was $80.61. The conversion price per share as of any day will equal the original issuance price plus the
accrued original issue discount to that day, divided by the conversion rate, or $81.83 per share as of June 30, 2003. The holders of the Convertible Notes may require the Company to purchase all or a portion of their notes on March 1, 2005, March 1,
2007, March 1, 2012, and March 1, 2017 at a price equal to the original issuance price plus the accrued original issue discount to the purchase dates. The Company may choose to pay the purchase price in cash and/or shares of common stock.

The Company may redeem all or a portion of the Convertible
Notes for cash at any time on or after March 1, 2007 at the original issuance price plus accrued original issue discount as of the redemption date. In addition, the Company will pay contingent cash interest during any six-month period commencing on
or after March 2, 2007 if the average market price of a note for a five trading day measurement period preceding the applicable six-month period equals 120% or more of the sum of the original issuance price and accrued original issue discount for
such note. The contingent cash interest in respect of any quarterly period will equal the greater of 1) the amount of regular cash dividends paid by the Company per share multiplied by the number of shares of common stock deliverable upon conversion
of the Convertible Notes at the then applicable conversion rate or 2) 0.0625% of the average market price of a note for a five trading day measurement period preceding the applicable six-month period provided, that if the Company does not pay cash
dividends during a semiannual period it will pay contingent interest semiannually at a rate of 0.125% of the average market price of a note for a five trading day measurement period.

7. Other items, net

License Agreement arbitration

In September 1985, the Company granted Johnson & Johnsons affiliate, Ortho Pharmaceutical Corporation, a license relating to certain patented
technology and know-how of the Company to sell Epoetin alfa throughout the United States for all human uses except dialysis and diagnostics. A number of disputes arose between Amgen and Johnson & Johnson as to their respective rights and
obligations under the various agreements between them, including the agreement granting the license (the License Agreement). These disputes between Amgen and Johnson & Johnson have been resolved through binding arbitration. One of
these disputes related to the alleged violation of the License Agreement by Johnson & Johnson. In October 2002, the Arbitrator issued a final order awarding the Company $150.0 million for Johnson & Johnsons breach of the License
Agreement. The legal award of $151.2 million, which included interest, was recorded in the fourth quarter of

2002. In January 2003, the Company was awarded reimbursement of its costs and expenses, as the successful party in the arbitration. In May 2003, the
Arbitrator issued a final order awarding the Company $74.0 million in such costs and expenses, which were recorded in the three months ended June 30, 2003.

Amgen Foundation contribution

During the three months ended June 30, 2003, the Company made a $50.0 million cash contribution to the Amgen Foundation. This contribution will allow the
Amgen Foundation to continue its support of non-profit organizations that focus on issues in health and medicine, science education, and other activities that strengthen local communities.

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Immunex Acquisition

On July 15, 2002, the Company acquired all of the outstanding common stock of Immunex Corporation (Immunex) in a transaction accounted for as
a business combination. Immunex was a leading biotechnology company dedicated to developing immune system science to protect human health. The acquisition of Immunex is expected to further advance Amgens role as a global biotechnology leader
with the benefits of accelerated growth and increased size, product base, product pipeline, and employees. The acquisition is also intended to enhance Amgens strategic position within the biotechnology industry by strengthening and
diversifying its (1) product base and product pipeline in key therapeutic areas, and (2) discovery research capabilities in proteins and antibodies. The acquisition was structured to qualify as a tax-free reorganization within the meaning of Section
368(a) of the Internal Revenue Code.

Unless otherwise
indicated, the discussions in this report of the results of operations for the three and six months ended June 30, 2003 and financial condition at June 30, 2003 include the results of operations of Immunex. Comparisons are made to the results of
operations for the three and six months ended June 30, 2002, which include only the historical results of Amgen.

Liquidity and Capital Resources

Cash, cash equivalents, and marketable securities

The Company had cash, cash equivalents, and marketable securities of $4,985.4 million and $4,663.9 million at June 30, 2003 and December 31, 2002,
respectively. Of the total cash, cash equivalents, and marketable securities at June 30, 2003, approximately $2.4 billion represents cash generated from operations in foreign tax jurisdictions and is intended for use in such foreign operations (see
Results of Operations- Income taxes). If these funds are repatriated for use in the Companys U.S. operations, additional taxes on certain of these amounts would be required to be paid. The Company does not currently anticipate a
need to repatriate these funds to the United States.

The
primary objectives for the Companys fixed income investment portfolio are liquidity and safety of principal. Investments are made to achieve the highest rate of return to the Company, consistent with these two objectives. The Companys
investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer.

Cash flows

Cash provided by operating activities has been and is expected to continue
to be the Companys primary recurring source of funds. During the six months ended June 30, 2003, operations provided $1,720.5 million of cash compared with $1,124.6 million during the same period last year. The increase in cash provided by
operating activities during the six months ended June 30, 2003 resulted primarily from higher earnings, excluding depreciation and amortization.

Capital expenditures totaled $544.0 million for the six months ended June 30, 2003 compared with $192.6
million for the same period a year ago. The increase in capital expenditures during the six months ended June 30, 2003 resulted primarily from capital expenditures related to the new Rhode Island manufacturing facility, the Puerto Rico manufacturing
expansion, and the Seattle research center.

The Company
receives cash from the exercise of employee stock options and proceeds from the sale of stock by Amgen pursuant to the employee stock purchase plans. During the six months ended June 30, 2003, employee stock option exercises and proceeds from the
sale of stock by Amgen pursuant to the employee stock purchase plans provided $302.9 million of cash compared with $141.4 million for the same period last year. Proceeds from the exercise of employee stock options will vary from period to period
based upon, among other factors, fluctuations in the market value of the Companys stock relative to the exercise price of such options.

The Company has a stock repurchase program primarily to reduce the dilutive effect of its employee stock option and stock purchase plans. During the six
months ended June 30, 2003, the Company repurchased 15.5 million shares of its common stock at a total cost of $899.6 million compared with 25.5 million shares repurchased at a cost of $1,306.0 million during the same period last year. Stock
repurchased during the six months ended June 30, 2002 includes 11.3 million shares of common stock repurchased simultaneously with the issuance of the 30-year, zero-coupon senior convertible notes (the Convertible Notes) discussed below
at a total cost of $650 million. In June 2002, the Board of Directors authorized the Company to repurchase up to an additional $2.0 billion of common stock through June 30, 2004. At the time of the additional authorization, the Company had
approximately $257.1 million remaining under the previous authorized stock repurchase program. The amount the Company spends on and the number of shares repurchased varies based on a variety of factors, including the stock price and blackout periods
in which the Company is restricted from repurchasing shares. As of June 30, 2003, $942.5 million was available for stock repurchases through June 30, 2004.

Debt financing

In March 2002, the Company issued $3.95 billion in aggregate face amount at maturity of Convertible Notes with a yield to maturity of 1.125%. The gross
proceeds from the offering were approximately $2.82 billion. The original issue discount of $1.13 billion is being accreted to the balance of the Convertible Notes and recognized as interest expense over the life of the Convertible Notes using the
effective interest method. Debt issuance costs were approximately $56.5 million and are being amortized on a straight-line basis over the life of the notes. The holders of the Convertible Notes may require the Company to purchase all or a portion of
their notes on March 1, 2005, March 1, 2007, March 1, 2012, and March 1, 2017 at a price equal to the original issuance price plus the accrued original issue discount to the purchase dates. In such event, the Company may choose to pay the purchase
price in cash and/or shares of common stock (see Note 6, Debt to the condensed consolidated financial statements).

To provide for financial flexibility and increased liquidity, the Company has established several other sources of debt financing. As of June 30, 2003,
the Company had $200 million of unsecured long-term debt securities outstanding. These unsecured long-term debt securities consisted of: 1) $100 million of debt securities that bear interest at a fixed rate of 6.5% and mature in 2007 under a $500
million debt shelf registration (the Shelf), and 2) $100 million of debt securities

that bear interest at a fixed rate of 8.1% and mature in 2097. In addition, the Company has $23 million of debt securities that bear interest at a fixed rate
of 6.2% and mature in 2003, which are classified as current liabilities. The Companys outstanding long-term debt is rated A2 by Moodys and A+ by Standard & Poors. Under the Shelf, all of the remaining $400 million of debt
securities available for issuance may be offered from time to time with terms to be determined by market conditions.

The Company has a commercial paper program which provides for unsecured short-term borrowings up to an aggregate face amount of $200 million. During the
six months ended June 30, 2003, the Company repaid all of the outstanding balances under the commercial paper program, totaling $100 million. In addition, the Company had an unsecured $150 million committed credit facility that expired on May 28,
2003. This credit facility supported the Companys commercial paper program.

The Company believes that existing funds, cash generated from operations, and existing sources of debt financing are adequate to satisfy its working capital and capital expenditure requirements for the foreseeable
future, as well as to support its stock repurchase program (see Financial Outlook- Liquidity and capital resources). However, the Company may raise additional capital from time to time.

Results of Operations

Product sales

Product sales for the three and six months ended June 30, 2003 primarily consisted of sales of EPOGEN® (Epoetin alfa), Aranesp® (darbepoetin alfa), NEUPOGEN® (Filgrastim), NeulastaTM (pegfilgrastim), and ENBREL® (etanercept). Product sales are influenced by a number of factors, including demand, wholesaler inventory management practices, foreign exchange
effects, new product launches, and acquisitions.

For the three
and six months ended June 30, 2003, worldwide product sales were $1,916.5 million and $3,552.4 million, respectively. Worldwide product sales increased $801.3 million and $1,528.6 million, or 72% and 76%, respectively, over the same periods last
year. These increases were principally driven by worldwide sales of ENBREL®, Aranesp®, and
NeulastaTM. Product sales for the three and six months ended June 30, 2003, excluding ENBREL®, were $1,612.5 million and $2,974.4 million,
respectively. These amounts represent increases of $497.3 million and $950.6 million, or 45% and 47%, respectively, over the same periods last year. U.S. product sales for the three and six months ended June 30, 2003 were $1,657.3 million and
$3,084.8 million, respectively. U.S. product sales increased $649.0 million and $1,257.4 million, or 64% and 69%, respectively, over the same periods last year. International product sales for the three and six months ended June 30, 2003 were $259.2
million and $467.6 million, respectively. International product sales increased $152.3 million and $271.2 million, or 142% and 138%, respectively, over the same periods last year. Excluding the beneficial impact of foreign currency exchange rates,
international product sales increased 102% and 100% for the three and six months ended June 30, 2003, respectively. For the three and six months ended June 30, 2003 and 2002, sales by product and geographic region were as follows (in millions):

In July 2002, the Company received U.S. Food and Drug Administration
(FDA) approval to market Aranesp® for
the treatment of chemotherapy-induced anemia in patients with non-myeloid malignancies. In August 2002, the European Commission approved Aranesp® for the treatment of anemia in adult cancer patients with solid tumors receiving chemotherapy. Aranesp® has been launched in most countries in Europe for this indication.

Combined EPOGEN® and worldwide Aranesp® sales were $958.8 million and $1,760.7 million for the three and six months ended June
30, 2003, respectively. Combined EPOGEN® and
worldwide Aranesp® sales increased $332.8 million
and $583.3 million, or 53% and 50%, respectively, over the same periods last year. These increases in combined sales were primarily driven by worldwide Aranesp® sales.

EPOGEN® sales for the three and six months ended June 30, 2003 were $611.1 million and $1,158.2 million, respectively. EPOGEN® sales increased $40.8 million and $75.7 million, or 7% and 7%, respectively, over the same periods last year. The
growth in reported EPOGEN® sales for the three
months ended June 30, 2003 was substantially all due to a favorable revised estimate of dialysis demand for prior quarters, which the Company refers to as spillover (see Note 1, Summary of significant accounting policies Product
sales). This revised estimate was based on independent data and indicated that dialysis use for Epoetin alfa was greater in prior quarters than initially estimated. EPOGEN® demand for the three months ended June 30, 2003 increased slightly compared to the prior year period. Growth in
reported EPOGEN® sales for the six months ended
June 30, 2003 was driven by a favorable revised estimate of dialysis demand for 2002 and mid-single digit growth in demand. Reported EPOGEN® sales for the six months ended June 30, 2003 was slightly offset by unfavorable inventory changes.

Worldwide Aranesp® sales for the three and six months ended June 30, 2003 were $347.7 million and $602.5
million, respectively. Aranesp® sales in the United
States for the three and six

months ended June 30, 2003 were $216.6 million and $374.5 million, respectively. U.S. Aranesp® sales increased $183.6 million and $317.0 million, or 556% and 551%, respectively, over
the same periods last year. These increases were principally driven by demand, reflecting the mid-year 2002 approval of Aranesp® for the treatment of chemotherapy-induced anemia in the United States, and to a lesser extent, favorable wholesaler inventory changes. International
Aranesp® sales were $131.1 million and $228.0
million for the three and six months ended June 30, 2003, respectively. International Aranesp® sales increased $108.4 million and $190.6 million, or 478% and 510%, respectively, over the same periods last year. These increases were principally driven by demand, reflecting the
strong acceptance of Aranesp® in Europe, and to a
lesser extent, favorable changes in foreign currency exchange rates. International Aranesp® sales growth for the three and six months ended June 30, 2003 benefited by $23 and $39 million, respectively, from favorable changes in foreign currency exchange rates.

NEUPOGEN®/NeulastaTM

The Company launched NeulastaTM in the United States in April 2002 to decrease the incidence of infection,
as manifested by febrile neutropenia in patients with non-myeloid malignancies receiving myelosuppressive anti-cancer drugs associated with a clinically significant incidence of febrile neutropenia. In August 2002, the European Commission approved
NeulastaTM for the reduction in the duration of neutropenia and the incidence of febrile neutropenia in patients
with cytotoxic chemotherapy for malignancy. NeulastaTM has been launched in Germany, Sweden, the United Kingdom, the
Netherlands, Spain, and Greece and will be launched in additional European countries as reimbursement is established.

Combined worldwide NEUPOGEN® and NeulastaTM
sales for the three and six months ended June 30, 2003 were $634.3 million and $1,176.2 million, respectively. Combined worldwide NEUPOGEN® and NeulastaTM
sales increased $161.1 million and $348.0 million, or 34% and 42%, respectively, over the same periods last year. The Company believes that the increase in combined sales for NEUPOGEN® and NeulastaTM for the three and six months ended June 30, 2003 was primarily driven by demand for NeulastaTM, which reflects the conversion of NEUPOGEN® patients to NeulastaTM in the United States and to a lesser extent, patient population growth. Worldwide NeulastaTM sales
for the three and six months ended June 30, 2003 were $303.5 million and $561.4 million, respectively, primarily driven by U.S. demand.

Worldwide NEUPOGEN® sales for the three and six months ended June 30, 2003 were $330.8 million and $614.8 million, respectively. Worldwide NEUPOGEN® sales decreased $32.6 million and $103.6 million, or 9% and 14%, respectively, from the
same periods last year. NEUPOGEN® sales in the
United States for the three and six months ended June 30, 2003 were $233.3 million and $427.3 million, respectively. U.S. NEUPOGEN® sales decreased $47.2 million and $133.9 million, or 17% and 24%, respectively, from the same periods last year. These decreases were primarily due to
a comparable rate of decline in NEUPOGEN® demand,
principally due to the conversion of patients from NEUPOGEN® to NeulastaTM. The Company believes that the rate of conversion has slowed. For the
three and six months ended June 30, 2003, international NEUPOGEN® sales were $97.5 million and $187.5 million, respectively. International NEUPOGEN® sales increased $14.6 million and $30.3 million, or 18% and 19%, respectively, over the same periods last year. These increases were entirely due to favorable changes in foreign currency
exchange rates.

ENBREL® sales for the three and six months ended June 30, 2003 were $304.0 million and $578.0 million, respectively. ENBREL® demand was primarily driven by the addition of new patients in both rheumatology and dermatology.

Royalty income

Royalty income principally relates to amounts received from sales of Epoetin
alfa by Johnson & Johnson in the United States for use in non-dialysis settings. Additionally in December 2002, the Company licensed the commercialization rights for Novantrone® in the United States to Serono S.A. for royalties based on future product sales. Royalty income was $91.9 million and
$183.3 million for the three and six months ended June 30, 2003, respectively. Royalty income increased $11.9 million and $34.9 million, or 15% and 24%, respectively, over the same periods last year. These increases were principally due to royalties
earned from Serono S.A. relating to its sales of Novantrone®.

Corporate partner revenues

Corporate partner revenues were $32.7 million and $66.6
million for the three and six months ended June 30, 2003, respectively. Of these amounts, $21.7 million and $48.0 million related to amounts earned from Kirin-Amgen, Inc. (Kirin-Amgen) for the three and six months ended June 30, 2003,
respectively. Corporate partner revenues decreased $21.2 million and $18.8 million, or 39% and 22%, respectively, over the same periods last year. These decreases were primarily due to lower revenues earned from Kirin-Amgen related to late-stage
development programs conducted on behalf of Kirin-Amgen, partially offset by higher revenues earned under other collaboration agreements.

Cost of sales

Cost of sales for the three and six months ended June 30, 2003 were $329.1 million and $612.4 million, respectively. Cost of sales increased $197.2
million and $376.9 million, or 150% and 160%, respectively, over the same periods last year. These increases were primarily due to increased sales which include ENBREL® for the 2003 period only. Cost of sales as a percentage of product sales was 17.2% and 17.2% for the three and six
months ended June 30, 2003, respectively, compared with 11.8% and 11.6% for the same periods last year. These increases were principally due to the inclusion of ENBREL®, which has significantly higher manufacturing costs and royalty expense compared to Amgens other products.
Additionally, the manufacturing costs of the Rhode Island production facility are greater than those of the Companys contract manufacturer. Cost of sales for the three and six months ended June 30, 2003 includes approximately $4.9 million and
$9.8 million, respectively, of compensation costs payable under the Immunex Corporate Retention Plan.

Research and development

Research and development (R&D) expenses for the three and six months ended June 30, 2003 were $393.7 million and $745.0 million,
respectively. During the three and six months ended June 30, 2003, R&D expenses increased $160.1 million and $308.0 million, or 69% and 70%, respectively, over the same periods last year. These increases were primarily due to: 1) higher
staff-related costs, in part due to Immunex, 2) higher outside R&D costs, principally licensing and milestone fees and clinical trials, and 3) higher clinical manufacturing costs. During the three months ended June 30, 2003, staff-related costs,
outside R&D costs, and clinical manufacturing costs increased

approximately $68 million, $60 million, and $32 million, respectively. During the six months ended June 30, 2003, staff-related costs, outside R&D costs,
and clinical manufacturing costs increased approximately $133 million, $110 million, and $65 million, respectively. Staff-related costs for the three and six months ended June 30, 2003 includes approximately $9.1 million and $18.8 million,
respectively, of compensation costs payable under the Immunex Corporate Retention Plan.

Selling, general and administrative

Selling, general and administrative (SG&A) expenses for the three and six months ended June 30, 2003 were $453.5 million and $843.6 million, respectively. During the three and six months ended June 30,
2003, SG&A expenses increased $133.0 million and $277.3 million, or 41% and 49%, respectively, over the same periods last year. These increases were primarily due to higher staff-related costs to support recent product launches and higher
outside marketing expenses in support of ENBREL®,
including the Wyeth profit share. During the three and six months ended June 30, 2003, staff-related costs increased approximately $72 million and $144 million, respectively, including $3.7 million and $8.5 million, respectively, of compensation
costs payable under the Immunex Corporate Retention Plan and outside marketing expenses increased approximately $71 million and $142 million, respectively.

Amortization of intangible assets

During the three and six months ended June 30, 2003, amortization expense related to the intangible assets acquired in connection with the Immunex
acquisition was $84.0 million and $167.9 million, respectively. Amortization of intangible assets is provided over their estimated useful lives ranging from 7 to 15 years on a straight-line basis.

Other items, net

During the three and six months ended June 30, 2003, other items, net
consisted of a benefit for the recovery of costs and expenses associated with a legal award related to an arbitration proceeding with Johnson & Johnson of $74.0 million, partially offset by a charitable contribution to the Amgen Foundation of
$50.0 million.

Income taxes

The Companys effective tax rate for the three and six months ended
June 30, 2003 was 28.5% and 28.4% respectively, compared with 31.0% for the same periods last year.

During 2002, the company restructured its Puerto Rico manufacturing operations using a controlled foreign corporation. As permitted in APB 23,
Accounting for Income TaxesSpecial Areas, the company does not provide for U.S. income taxes on the controlled foreign corporations undistributed earnings that are intended to be permanently reinvested outside the U.S. In
addition, the Puerto Rico manufacturing operations were entitled to a possession tax credit for a portion of 2002.

The Companys effective tax rate for the three and six months ended June 30, 2003 has decreased primarily due to an increase in the amount of
permanently reinvested foreign earnings and amortization expense of acquired intangible assets partially offset by the loss of the possession tax credit.

The Company estimates spending on capital projects and equipment to be approximately $1.3 billion to $1.5 billion for 2003, which reflects higher spending
on capital projects including the new Rhode Island manufacturing plant, the Puerto Rico manufacturing expansion, and the Seattle research center.

Results of operations

In the future, the Company expects growth of its businesses to be driven by new products, primarily Aranesp®, ENBREL®, and NeulastaTM (see Forward looking statements and factors that may affect Amgen).

EPOGEN®

EPOGEN® is approved in the United States for the treatment of anemia associated with chronic renal failure. The Company believes EPOGEN® sales growth will come primarily from underlying patient population growth. Patients
receiving treatment for end-stage renal disease are covered primarily under medical programs provided by the federal government. The Company believes future EPOGEN® sales growth may also be affected by future changes in reimbursement rates or a change in the basis for reimbursement
by the federal government. EPOGEN® may compete with
Aranesp® in the United States as health care
providers may use Aranesp® to treat anemia
associated with chronic renal failure instead of EPOGEN®.

Aranesp®

In 2001, Aranesp® was approved in the United States, most countries in Europe, Australia, and New Zealand
for the treatment of anemia associated with chronic renal failure, including patients on dialysis and patients not on dialysis. In July 2002, Aranesp® was approved in the United States for the treatment of chemotherapy-induced anemia in patients with non-myeloid malignancies. In August 2002,
Aranesp® was approved in Europe for the treatment
of anemia in adult cancer patients with solid tumors receiving chemotherapy. Aranesp® has been launched in most countries in Europe for this indication. In June 2003, the European Committee on Proprietary Medicinal Products recommended to extend the Aranesp® label to include the treatment of chemotherapy-induced anemia in adult patients with
non-myeloid malignancies.

The Company believes future
worldwide Aranesp® sales growth will be dependent,
in part, on such factors as: the effects of competitive products or therapies, penetration of existing and new market opportunities, and changes in foreign currency exchange rates. In addition, future worldwide Aranesp® sales growth may be affected by cost containment pressures from governments
and private insurers on health care providers, as well as the availability of reimbursement by third-party payors, including governments and private insurance plans. For example, effective January 1, 2003, the Centers for Medicare and Medicaid
Services (CMS) instituted certain changes to its payment system that included a rule setting a significantly reduced reimbursement rate for Aranesp® for Medicare patients in the hospital outpatient setting. While the Company believes that this new rule

is based on inaccurate information, the Company cannot predict whether it will be successful in correcting inaccuracies underlying this rule, or if such
reimbursement changes for Aranesp® in this setting
may impact reimbursement in other settings, by other payors, or for its other products. The hospital outpatient Medicare setting accounts for approximately 10% of U.S. revenues of Aranesp®.

NEUPOGEN®/NeulastaTM

In January 2002, NeulastaTM was approved in the United States to decrease the incidence of infection, as manifested by febrile neutropenia in patients
with non-myeloid malignancies receiving myelosuppressive anti-cancer drugs associated with a clinically significant incidence of febrile neutropenia. The Company launched NeulastaTM in the United States in April 2002. In August 2002, NeulastaTM was approved in Europe for the reduction in the duration of neutropenia and the incidence of febrile neutropenia in patients with cytotoxic chemotherapy for malignancy. NeulastaTM has been launched in Germany, Sweden, the United Kingdom, the Netherlands, Spain, and Greece and will be launched in
additional European countries as reimbursement is established.

NEUPOGEN® is approved in the United States
to: decrease the incidence of infection, as manifested by febrile neutropenia, in chemotherapy patients with non-myeloid malignancies (the same use for which NeulastaTM is approved); to reduce the duration of neutropenia for patients undergoing myeloablative therapy followed by bone marrow transplantation; to reduce the
incidence and duration of neutropenia-related consequences in patients with severe chronic neutropenia; for use in mobilization of peripheral blood progenitor cells for stem cell transplantation; and to reduce the recovery time of neutrophils and
the duration of fever following chemotherapy treatment in patients being treated for acute myelogenous leukemia. NEUPOGEN® is approved in Europe, Canada, and Australia for these same indications as well as for the treatment of neutropenia in HIV patients receiving antiviral
and/or other myelosuppressive medications.

The Company
believes future worldwide NEUPOGEN® and
NeulastaTM sales growth will depend on penetration of existing markets, the conversion of NEUPOGEN® patients to NeulastaTM, patient population growth, price increases, the effects of competitive products or therapies, the development of new treatments for cancer, and
changes in foreign currency exchange rates. In addition, future worldwide sales growth may be affected by cost containment pressures from governments and private insurers on health care providers, as well as the availability of reimbursement by
third-party payors, including governments and private insurance plans. Further, chemotherapy treatments that are less myelosuppressive may require less NEUPOGEN®/NeulastaTM. NEUPOGEN® competes with
NeulastaTM in the United States and Europe. The Company believes that U.S. NEUPOGEN® sales have been and may continue to be adversely impacted by
NeulastaTM, however the rate of conversion of patients to NeulastaTM has slowed. The Company cannot accurately predict the rate or timing of the remaining conversion of NEUPOGEN® patients to NeulastaTM.

ENBREL®

As a result of the Immunex acquisition in July 2002, the Company acquired the rights to ENBREL® in the United States and Canada. ENBREL® is approved in the United States for: the reduction of the signs and symptoms in
patients with moderately to severely active rheumatoid arthritis (RA); treating moderately to severely active polyarticular-course juvenile RA in patients who have had an inadequate response to one or more disease modifying antirheumatic
drugs; inhibiting the progression of structural damage in patients with moderately to severely active RA;

and for reducing the signs and symptoms of active arthritis in patients with psoriatic arthritis. The Company believes that future sales of ENBREL® will depend on: limits on the current supply of and
sources of ENBREL®, penetration of existing and new
market opportunities, the availability and extent of reimbursement by third-party payors, the effects of competing products or therapies, and any potential adverse developments discovered with respect to ENBREL®s safety.

ENBREL® is currently marketed in the United States and Canada under a co-promotion agreement with Wyeth and, accordingly, Wyeth receives a share of the profits
from sales of ENBREL®. In late December 2002, the
FDA approved the Rhode Island manufacturing facility and the related third-party fill and finish facilities. Because of these plant approvals, additional supply of ENBREL® is available to patients. In July 2003, the FDA approved ENBREL® to reduce the signs and symptoms in patients with active ankylosing spondylitis. Also,
in July 2003, Amgen and Wyeth announced the filing of a supplemental Biologics License Application for the use of ENBREL® to treat moderate to severe plaque psoriasis.

Trends expected to impact future operations

Future operating results of the Company may be impacted by a number of factors. The following trends in our business are expected to impact our future
liquidity and results of operations:



SG&A expenses are expected to continue to be impacted by seasonal trends in the fourth quarter that increase expenses over the three prior quarters.



reported sales in the first quarter for each of EPOGEN® and combined NEUPOGEN®/NeulastaTM have
tended to be comparable or slightly less than respective reported sales in the fourth quarter of the previous year.



non-cash amortization expense of acquired identifiable intangible assets, principally related to ENBREL®, will be approximately $340 million, pre-tax, on an annual basis



in the second half of 2003, quarterly comparisons to prior periods will reflect the inclusion of ENBREL® and the launch of Aranesp® in oncology in both periods.

Forward looking statements and factors that may affect Amgen

This report and other documents we file with the Securities and Exchange Commission (SEC) contain forward
looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business or others on our behalf, our beliefs and our managements assumptions. In addition, we, or others on
our behalf, may make forward looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls, and conference
calls. Words such as expect, anticipate, outlook, could, target, project, intend, plan, believe, seek, estimate,
should, may, assume, continue, variations of such words and similar expressions are intended to identify such forward looking statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties, and assumptions that are difficult to predict. We have based our forward looking statements on our managements beliefs and assumptions based on information available to our management at the time the
statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied, or forecast by our forward looking statements. Reference is made in particular to forward looking statements regarding
product sales, expenses, earnings per share, liquidity and capital resources, and trends. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or

obligation to update publicly any forward looking statements after the distribution of this report, whether as a result of new information, future events,
changes in assumptions, or otherwise.

The following items are
representative of the risks, uncertainties, and assumptions that could affect the outcome of the forward looking statements.

Our sales depend on payment and reimbursement from third-party payors, and a reduction in the payment rate or reimbursement could result in decreased
use or sales of our products.

In both domestic and
foreign markets, sales of our products are dependent, in part, on the availability of reimbursement from third-party payors such as state and federal governments, under programs such as Medicare and Medicaid in the United States, and private
insurance plans. Medicare does not cover prescriptions for ENBREL®. In certain foreign markets, the pricing and profitability of our products generally are subject to government controls. In the United States, there have been, there are, and we expect there will continue to be, a
number of state and federal proposals that could limit the amount that state or federal governments will pay to reimburse the cost of drugs. In addition, we believe the increasing emphasis on managed care in the United States has and will continue
to put pressure on the price and usage of our products, which may adversely impact product sales. Further, when a new therapeutic product is approved, the availability of governmental and/or private reimbursement for that product is uncertain, as is
the amount for which that product will be reimbursed. We cannot predict the availability or amount of reimbursement for our recently approved products or product candidates, including those at a late stage of development, and current reimbursement
policies for marketed products may change at any time; we believe that sales of Aranesp® and NeulastaTM are and will be affected by government and private payor
reimbursement policies. Effective January 1, 2003, CMS instituted certain changes to its payment system that included a rule setting a significantly reduced reimbursement rate for Aranesp® for Medicare patients in the hospital outpatient setting. While we believe that this
new rule is based on inaccurate information, we cannot predict whether we will be successful in correcting inaccuracies underlying this rule, or if such reimbursement changes for Aranesp® in this setting may impact reimbursement in other settings, by other payors, or for our
other products.

If reimbursement for our marketed products
changes adversely or if we fail to obtain adequate reimbursement for our other current or future products, health care providers may limit how much or under what circumstances they will administer them, which could reduce the use of our products or
cause us to reduce the price of our products. This could result in lower product sales or revenues which could have a material adverse effect on us and our results of operations. For example, in the United States the use of EPOGEN® in connection with treatment for end-stage renal
disease is funded primarily by the U.S. federal government. In early 1997, CMS instituted a reimbursement change for EPOGEN® which materially and adversely affected our EPOGEN® sales until the policies were revised.

Our current products and products in development cannot be sold if we do not obtain and maintain regulatory approval.

We conduct research, preclinical testing, and clinical trials and we
manufacture and contract manufacture our product candidates. We also manufacture and contract manufacture, price, sell, distribute, and market or co-market our products for their approved indications. These activities are subject to extensive
regulation by numerous state and federal governmental authorities in the United States, such as the FDA and CMS, as well as in foreign countries, including Europe. Currently, we

are required in the United States and in foreign countries to obtain approval from those countries regulatory authorities before we can market and sell
our products in those countries. In our experience, obtaining regulatory approval is costly and takes many years, and after it is obtained, it remains costly to maintain. The FDA and other U.S. and foreign regulatory agencies have substantial
discretion to terminate clinical trials, require additional testing, delay or withhold registration and marketing approval, require changes in labeling of our products, and mandate product withdrawals. Substantially all of our marketed products are
currently approved in the United States and most are approved in Europe and in other foreign countries for specific uses. We currently manufacture and market all our approved products, and we plan to manufacture and market many of our potential
products. Even though we have obtained regulatory approval for our marketed products, these products and our manufacturing processes are subject to continued review by the FDA and other regulatory authorities. In addition, ENBREL® is manufactured both by us at our Rhode Island
manufacturing facility and by a third-party contract manufacturer, Boehringer Ingelheim Pharma KG (BI Pharma), and fill and finish of bulk product produced at our Rhode Island manufacturing facility is done by third-party service
providers. BI Pharma and these third-party service providers are subject to FDA regulatory authority. See Our sources of supply for ENBREL® are limited. In addition, later discovery of unknown problems with our products or manufacturing processes or those of our contract
manufacturers or third-party service providers could result in restrictions on such products or manufacturing processes, including potential withdrawal of the products from the market. If regulatory authorities determine that we or our contract
manufacturers or third-party service providers have violated regulations or if they restrict, suspend, or revoke our prior approvals, they could prohibit us from manufacturing or selling our marketed products until we or our contract manufacturers
or third-party service providers comply or indefinitely. In addition, if regulatory authorities determine that we have not complied with regulations in the research and development of a product candidate, then they may not approve the product
candidate and we will not be able to market and sell it. If we are unable to market and sell our products or product candidates, our business and results of operations would be materially and adversely affected.

If our intellectual property positions are challenged, invalidated or
circumvented, or if we fail to prevail in present and future intellectual property litigation, our business could be adversely affected.

The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and often involve complex legal, scientific, and factual
questions. To date, there has emerged no consistent policy regarding breadth of claims allowed in such companies patents. Third parties may challenge, invalidate, or circumvent our patents and patent applications relating to our products,
product candidates, and technologies. In addition, our patent positions might not protect us against competitors with similar products or technologies because competing products or technologies may not infringe our patents. For certain of our
product candidates, there are third parties who have patents or pending patents that they may claim prevent us from commercializing these product candidates in certain territories. Patent disputes are frequent, costly, and can preclude
commercialization of products. We are currently, and in the future may be, involved in patent litigation. For example, we are involved in ongoing patent infringement lawsuits against Transkaryotic Therapies, Inc. (TKT) and Aventis with
respect to our erythropoietin patents. If we lose or settle these or other litigations at certain stages or entirely, we could be subject to competition and/or significant liabilities, we could be required to enter into third-party licenses for the
infringed product or technology, or we could be required to cease using the technology or product in dispute. In addition, we cannot guarantee that such licenses will be available on terms acceptable to us.

Our success depends in part on our ability to obtain and defend patent rights and other intellectual
property rights that are important to the commercialization of our products and product candidates. We have filed applications for a number of patents and have been granted patents or obtained rights relating to erythropoietin, recombinant G-CSF,
darbepoetin alfa, pegfilgrastim, etanercept, and our other products and potential products. We market our erythropoietin, recombinant G-CSF, darbepoetin alfa, pegfilgrastim, and etanercept products as EPOGEN®, NEUPOGEN®, Aranesp®, NeulastaTM, and
ENBREL®, respectively. In the United States, we
have been issued or obtained rights to several patents relating to erythropoietin that generally cover DNA and host cells, processes for making erythropoietin, various product claims to erythropoietin, cells that make levels of erythropoietin, and
pharmaceutical compositions of erythropoietin. We have also been issued or obtained rights to U.S. patents relating to G-CSF that cover aspects of DNA, vectors, cells, processes, polypeptides, methods of treatment using G-CSF polypeptides, methods
of enhancing bone marrow transplantation and treating burn wounds, methods for recombinant production of G-CSF, and analogs of G-CSF. We have been issued or obtained rights to U.S. and European patents relating to pegfilgrastim (pegylated G-CSF). We
also have been granted or obtained rights to a patent in Europe relating to erythropoietin, a patent in Europe relating to G-CSF, two patents in Europe relating to darbepoetin alfa and hyperglycosylated erythropoietic proteins, and a patent in the
United States and a patent in Europe relating to anakinra. We have been granted or have obtained rights to patents relating to etanercept in the United States that generally cover DNA (issued in 1995 and 2000); products (issued in 1999 and 2001);
and processes for using (issued in 1997). These patents have varying expiration dates; with the latest U.S. etanercept related patent expiring in 2014. We have been granted or have obtained rights to patents relating to etanercept in Europe. The
latest European patent relating to etanercept expires in 2011.

Limits on supply for ENBREL® may
constrain ENBREL® sales.

U.S. and Canadian supply of ENBREL® is impacted by many manufacturing and production variables, such as the timing and
actual number of production runs, production success rate, bulk drug yield, and the timing and outcome of product quality testing. For example, in the second quarter of 2002, the prior co-marketer with respect to ENBREL®, experienced a brief period where no ENBREL® was available to fill patient prescriptions, primarily due to variation in the
expected production yield from BI Pharma. Once supply of ENBREL® became available, the prior co-marketer resumed filling orders on a first come, first served basis. If we are at any time unable to provide an uninterrupted supply of ENBREL® to patients, we may lose patients, physicians may elect to prescribe competing
therapeutics instead of ENBREL®, our ENBREL® sales will be adversely affected, any of which could
materially and adversely affect our results of operations. See We are dependent on third parties for a significant portion of our supply and the fill and finish of ENBREL®. and Our sources of supply for ENBREL® are limited.

We are dependent on third parties for a significant portion of our supply
and the fill and finish of ENBREL®.

We currently manufacture ENBREL® at our Rhode Island manufacturing facility. However, we also depend on third parties
for a significant portion of our ENBREL® supply as
well as for the fill and finish of ENBREL® that we
manufacture. BI Pharma is currently our sole third-party supplier of ENBREL®; accordingly, our U.S. and Canadian supply of ENBREL® is currently significantly dependent on BI Pharmas production schedule for ENBREL®. We would be unable to produce ENBREL® in sufficient quantities to substantially offset shortages in BI Pharmas scheduled production if BI Pharma or other third-party manufacturers
used for ENBREL® production were to

cease or interrupt production or services or otherwise fail to supply materials, products, or services to us for any reason, including due to labor shortages
or disputes, due to regulatory requirements or action, or due to contamination of product lots or product recalls. This in turn could materially reduce our ability to satisfy demand for ENBREL®, which could materially and adversely affect our operating results. Factors that will
affect our actual supply of ENBREL® at any time
include, without limitation, the following:



BI Pharma does not produce ENBREL® continuously; rather, it produces the drug through a series of periodic campaigns throughout the year. The amount of commercial inventory available to us at any time depends on a variety
of factors, including the timing and actual number of BI Pharmas production runs, level of production yields and success rates, timing and outcome of product quality testing, and the amount of vialing capacity.



BI Pharma schedules the vialing production runs for ENBREL® in advance, based on the expected timing and yield of bulk drug production runs. Therefore, if BI Pharma realizes production yields beyond expected
levels, or provides additional manufacturing capacity for ENBREL®, it may not have sufficient vialing capacity for all of the ENBREL® bulk drug that it produces. As a result, even if we are able to increase our supply of ENBREL® bulk drug, BI Pharma may not be able to fill and finish the extra bulk drug in time to prevent any supply interruptions.

In addition, we are dependent on third parties
for fill and finish of ENBREL® bulk drug
manufactured at our Rhode Island facility. If third-party fill and finish service providers are unable to provide sufficient capacity or otherwise unable to provide services to us, then supply of ENBREL® could be adversely affected. See Limits on supply for ENBREL® may constrain ENBREL® sales. and Our sources of supply for ENBREL® are limited.

Our sources of supply for ENBREL® are limited.

ENBREL® supply for the United States and Canada is produced by us at our Rhode Island facility and by BI Pharma, currently our sole source third-party
supplier. See We are dependent on third parties for a significant portion of our supply and the fill and finish of ENBREL®. In addition, our current plan includes construction of an additional large-scale cell culture commercial manufacturing facility at the site of
the current Rhode Island manufacturing facility. We have entered into a manufacturing agreement with Genentech, Inc. (Genentech) to produce ENBREL® at Genentechs manufacturing facility in South San Francisco, California. The manufacturing facility is subject to
FDA approval, which the parties hope to obtain in 2004. Under the terms of the agreement, Genentech will produce ENBREL® through 2005, with an extension through 2006 by mutual agreement. In addition, Wyeth is constructing a new manufacturing facility in Ireland, which is
expected to increase the U.S. and Canadian supply of ENBREL®. If the additional ENBREL® manufacturing capacity at the Rhode Island site, at Genentech, or in Ireland are not completed on time, or if these manufacturing facilities do not receive FDA approval before we encounter supply constraints, our
ENBREL® sales would be restricted, which could have
a material adverse effect on our results of operations.

We
face substantial competition, and others may discover, develop, acquire or commercialize products before or more successfully than we do.

We operate in a highly competitive environment. Our products compete with other products or treatments for diseases for which our products may be
indicated. For example, ENBREL® competes in certain
circumstances with rheumatoid arthritis products marketed by Abbott

Laboratories/Knoll, Centocor Inc./Johnson & Johnson, Aventis, Pharmacia, and Merck as well as the generic drug methotrexate and may face competition from
potential therapies being developed. Further, we believe that some of our newer products and late stage product candidates or products approved for other indications that may be submitted for new indications, may face competition when and as they
are approved and marketed. For example, in the United States, Aranesp® competes with an Epoetin alfa product marketed by Johnson & Johnson in certain anemia markets and Enbrel® may compete in certain circumstances with psoriasis products marketed by Biogen, among others. Additionally, some of our competitors, including
biotechnology and pharmaceutical companies, market products or are actively engaged in research and development in areas where we have products or where we are developing product candidates or new indications for existing products. In the future, we
expect that our products will compete with new drugs currently in development, drugs approved for other indications that may be approved for the same indications as those of our products, and off-label use of drugs approved for other indications.
Our products may compete against products that have lower prices, superior performance, are easier to administer, or that are otherwise competitive with our products. Our inability to compete effectively could adversely affect product sales.

Large pharmaceutical corporations may have greater clinical,
research, regulatory, manufacturing, marketing, financial and human resources than we do. In addition, some of our competitors may have technical or competitive advantages over us for the development of technologies and processes. These resources
may make it difficult for us to compete with them to successfully discover, develop, and market new products and for our current products to compete with new products or new product indications that these competitors bring to market. Business
combinations among our competitors may also increase competition and the resources available to our competitors.

Certain raw materials
necessary for commercial manufacturing and formulation of our products are provided by single-source unaffiliated third-party suppliers. Also, certain medical devices and components necessary for fill, finish, and packaging of our products are
provided by single-source unaffiliated third-party suppliers. Certain of these raw materials, medical devices, and components are the proprietary products of these unaffiliated third-party suppliers and, in some cases, such proprietary products are
specifically cited in our drug application with the FDA so that they must be obtained from that specific sole source and could not be obtained from another supplier unless and until the FDA approved that other supplier. We would be unable to obtain
these raw materials, medical devices, or components for an indeterminate period of time if these third-party single suppliers were to cease or interrupt production or otherwise fail to supply these materials or products to us for any reason,
including due to regulatory requirements or action, due to adverse financial developments at or affecting the supplier, or due to labor shortages or disputes. This, in turn, could materially and adversely affect our ability to satisfy demand for our
products, which could materially and adversely affect our operating results.

Also, certain of the raw materials required in the commercial manufacturing and the formulation of our products are derived from biological sources, including bovine serum and human serum albumin, or HSA. We are
investigating alternatives to certain biological sources. Raw materials may be subject to contamination and/or recall. A material shortage, contamination, and/or recall could adversely impact or disrupt our commercial manufacturing of our products
or could result in a mandated withdrawal of our products from the

market. This too, in turn, could adversely affect our ability to satisfy demand for our products, which could materially and adversely affect our operating
results.

Our product development efforts may not result in
commercial products.

We intend to continue an aggressive
research and development program. Successful product development in the biotechnology industry is highly uncertain, and very few research and development projects produce a commercial product. Product candidates that appear promising in the early
phases of development, such as in early human clinical trials, may fail to reach the market for a number of reasons, such as:



the product candidate did not demonstrate acceptable clinical trial results even though it demonstrated positive preclinical trial results



the product candidate was not effective in treating a specified condition or illness



the product candidate had harmful side effects on humans



the necessary regulatory bodies, such as the FDA, did not approve our product candidate for an intended use



the product candidate was not economical for us to manufacture and commercialize



other companies or people have or may have proprietary rights to our product candidate, such as patent rights, and will not let us sell it on reasonable terms, or at all



the product candidate is not cost effective in light of existing therapeutics

Several of our product candidates have failed at various stages in the product development process, including Brain Derived Neurotrophic Factor
(BDNF) and Megakaryocyte Growth and Development Factor (MGDF). For example, in 1997, we announced the failure of BDNF for the treatment of amyotrophic lateral sclerosis, or Lou Gehrigs Disease, because the product
candidate, when administered by injection, did not produce acceptable clinical results for a specific use after a phase 3 trial, even though BDNF had progressed successfully through preclinical and earlier clinical trials. In addition, in 1998, we
discontinued development of MGDF, a novel platelet growth factor, at the phase 3 trial stage after several people in platelet donation trials developed low platelet counts and neutralizing antibodies. Of course, there may be other factors that
prevent us from marketing a product. We cannot guarantee we will be able to produce commercially successful products. Further, clinical trial results are frequently susceptible to varying interpretations by scientists, medical personnel, regulatory
personnel, statisticians, and others which may delay, limit, or prevent further clinical development or regulatory approvals of a product candidate. Also, the length of time that it takes for us to complete clinical trials and obtain regulatory
approval for product marketing has in the past varied by product and by the intended use of a product. We expect that this will likely be the case with future product candidates and we cannot predict the length of time to complete necessary clinical
trials and obtain regulatory approval. See Our current products and products in development cannot be sold if we do not obtain and maintain regulatory approval.

We may be required to perform additional clinical trials or change the labeling of our products if we or others identify
side effects after our products are on the market.

If we
or others identify side effects after any of our products are on the market, or if manufacturing problems occur, regulatory approval may be withdrawn and reformulation of our products, additional clinical trials, changes in labeling of our products,
and changes to or re-approvals of our manufacturing facilities may be required, any of which could have a material adverse effect on sales of the affected products and on our business and results of operations.

For example, because ENBREL® has only been marketed since 1998, its long-term effects on the development or course of serious infection, malignancy,
and autoimmune disease are largely unknown and more rarely occurring side effects may not be known. In May 1999, Immunex announced an update to the package insert for ENBREL® to advise doctors not to start using ENBREL® in patients who have an active infection, and for doctors to exercise caution when considering using ENBREL® in patients with a history of recurring infections or
with underlying conditions that may predispose patients to infections. In October 2000, Immunex again revised the package insert for ENBREL® in response to spontaneous adverse events reported to Immunex, including rare cases of hematologic and central nervous system disorders. The causal
relationship between these adverse events and therapy with ENBREL® remains unclear. In January 2001, Immunex revised the package insert for ENBREL® to advise doctors that rare cases of central nervous system disorders, including seizures, and rare cases of tuberculosis have also been reported in patients using ENBREL®. It is possible that additional spontaneous adverse
events will be reported to us as experience with ENBREL® continues. If we or others identify new adverse events for patients treated with ENBREL®, additional precautions, warnings, or other changes in the label for ENBREL® may be required.

We may be required to defend lawsuits or pay damages for product liability claims.

Product liability is a major risk in testing and marketing biotechnology and pharmaceutical products. We face substantial
product liability exposure in human clinical trials and for products that we sell after regulatory approval. Product liability claims, regardless of their merits, could be costly and divert managements attention, and adversely affect our
reputation and the demand for our products.

Our operating
results may fluctuate, and this fluctuation could cause financial results to be below expectations.

Our operating results may fluctuate from period to period for a number of reasons. In budgeting our operating expenses, we assume that revenues will
continue to grow; however, some of our operating expenses are fixed in the short term. Because of this, even a relatively small revenue shortfall may cause a periods results to be below our expectations or projections. A revenue shortfall
could arise from any number of factors, some of which we cannot control. For example, we may face:



lower than expected demand for our products



inability to provide adequate supply of our products



changes in the governments or private payors reimbursement policies for our products



changes in wholesaler buying patterns



increased competition from new or existing products



fluctuations in foreign currency exchange rates



changes in our product pricing strategies

Of these, we would only have control over changes in our product pricing strategies and, of course, there may be other factors that affect our revenues in
any given period.

We plan to grow rapidly, and if we fail to adequately manage that growth our business could be
adversely impacted.

We have an aggressive growth plan
that includes substantial and increasing investments in research and development, sales and marketing, and facilities. Our plan has a number of risks, some of which we cannot control. For example:



we will need to generate higher revenues to cover a higher level of operating expenses, and our ability to do so may depend on factors that we do not control



we will need to attract and assimilate a large number of new employees



we will need to manage complexities associated with a larger and faster growing organization



we will need to accurately anticipate demand for the products we manufacture and maintain adequate manufacturing capacity, and our ability to do so may depend on factors that we do
not control

Of course, there may be other risks
and we cannot guarantee that we will be able to successfully manage these or other risks.

Our stock price, like that of other biotechnology companies, is highly volatile. For example, in the fifty-two weeks prior to June 30, 2003, the trading
price of our common stock has ranged from a high of $67.54 per share to a low of $30.57 per share. Our stock price may be affected by such factors as:



clinical trial results



adverse developments regarding the safety or efficacy of our products



actual or anticipated product supply constraints



product development announcements by us or our competitors



regulatory matters



announcements in the scientific and research community



intellectual property and legal matters



changes in reimbursement policies or medical practices



broader industry and market trends unrelated to our performance

In addition, if our revenues or earnings in any period fail to meet the investment communitys expectations, there could be an immediate adverse
impact on our stock price.

Our corporate compliance program
cannot guarantee that we are in compliance with all potentially applicable federal and state regulations.

The development, manufacturing, pricing, sales, and reimbursement of our products, together with our general operations, is subject to extensive federal
and state regulation. See Our current products and products in development cannot be sold if we do not obtain and maintain regulatory approval. and We may be required to perform additional clinical trials or change the
labeling of our products if we or others identify side effects after our products are on the market. While we have developed and instituted a corporate compliance program based on current best practices, we cannot assure you that we or our
employees are or will be in compliance with all potentially applicable federal and state regulations. If we fail to comply with any of these regulations a range of actions could result, including, but not limited to, the termination of clinical

trials, the failure to approve a product candidate, restrictions on our products or manufacturing processes, including withdrawal of our products from the
market, significant fines, or other sanctions or litigation.

Our marketing of ENBREL® will be
dependent in part upon Wyeth.

Under the amended and
restated co-promotion agreement, we and Wyeth market and sell ENBREL® in the United States and Canada. An ENBREL® management committee comprised of an equal number of representatives from us and Wyeth is responsible for overseeing the marketing and sales of ENBREL®, including strategic planning, approval of an annual marketing plan, product pricing,
and establishing an ENBREL® brand team. The
ENBREL® brand team, with equal representation from
us and Wyeth, will prepare and implement the annual marketing plan and will be responsible for all sales activities. If Wyeth fails to market ENBREL® effectively or if we and Wyeth fail to coordinate our efforts effectively, our sales of ENBREL® may be adversely affected.

Guidelines and recommendations published by various organizations can
reduce the use of our products.

Government agencies
promulgate regulations and guidelines directly applicable to us and to our products. However, professional societies, practice management groups, private health/science foundations, and organizations involved in various diseases from time to time
may also publish guidelines or recommendations to the health care and patient communities. Recommendations of government agencies or these other groups/organizations may relate to such matters as usage, dosage, route of administration, and use of
concomitant therapies. Organizations like these have in the past made recommendations about our products. Recommendations or guidelines that are followed by patients and health care providers could result in decreased use of our products. In
addition, the perception by the investment community or stockholders that recommendations or guidelines will result in decreased use of our products could adversely affect prevailing market prices for our common stock.

We may not realize all of the anticipated benefits of our merger with
Immunex.

On July 15, 2002, we merged with Immunex
Corporation. The success of our merger with Immunex will depend, in part, on our ability to realize the anticipated synergies, cost savings, and growth opportunities from integrating the businesses of Immunex with the businesses of Amgen. Our
success in realizing these benefits and the timing of this realization depend upon the successful integration of the operations of Immunex. The integration of two independent companies is a complex, costly, and time-consuming process. The
difficulties of combining the operations of the companies include, among others:



consolidating research and development and manufacturing operations



retaining key employees



consolidating corporate and administrative infrastructures



coordinating sales and marketing functions



preserving ours and Immunexs research and development, distribution, marketing, promotion, and other important relationships



minimizing the diversion of managements attention from ongoing business concerns

In addition, even if we are able to integrate Immunexs operations successfully, this integration
may not result in the realization of the full benefits of the synergies, cost savings, or sales and growth opportunities that we expect or that these benefits will be achieved within the anticipated time frame. For example, the elimination of
significant duplicative costs may not be possible or may take longer than anticipated and the benefits from the merger may be offset by costs incurred in integrating the companies. We cannot assure you that the integration of Immunex with us will
result in the realization of the full benefits anticipated by us to result from the merger. Our failure to achieve these benefits could have a material adverse effect on our results of operations.

The Company maintains disclosure controls and procedures, as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in the Companys Exchange Act
reports is recorded, processed, summarized, and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to the Companys management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, the Companys management recognized that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and in reaching a reasonable level of assurance the Companys management necessarily was required to apply
its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has carried out an evaluation under the supervision and with the participation of the Companys management, including the Companys
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures. Based upon their evaluation and subject to the foregoing, the Chief Executive Officer and
Chief Financial Officer concluded that the Companys disclosure controls and procedures were effective in ensuring that material information relating to the Company, is made known to the Chief Executive Officer and Chief Financial Officer by
others within the Company during the period in which this report was being prepared.

Certain of the Companys legal proceedings are reported in the Companys Annual Report on Form 10-K for the year ended December 31, 2002, with material developments since that report described in the Companys Form 10-Q for
the three months ended March 31, 2003, and below. While it is not possible to predict accurately or to determine the eventual outcome of these matters, the Company believes that the outcome of these proceedings will not have a material adverse
effect on the annual financial statements of the Company.

Average Wholesale
Price Litigation

On May 13, 2003, the United States
District Court, District of Massachusetts (the Massachusetts Court) issued a decision on the Defendants Motion to Dismiss In Re Pharmaceutical Industry Average Wholesale Price Litigation. Amgen was dismissed without
prejudice from the case and certain claims against Immunex were also dismissed without prejudice. The Plaintiffs were granted leave to amend and on June 13, 2003, an amended complaint was filed with the Massachusetts Court in which Amgen and Immunex
were named as defendants. The amended complaint makes substantially the same allegations as the original complaint.

Amgen was served with this complaint on
July 14, 2003 and Immunex was served with this complaint on July 15, 2003. This complaint asserts varying claims related to deceptive trade practices and common law fraud. The complaint seeks an undetermined amount of damages, as well as other
relief, including declaratory and injunctive relief.

Johnson & Johnson
arbitrations

The parties reached a settlement of
Amgens claim for its costs and expenses incurred in the Termination Arbitration and on May 29, 2003, Johnson & Johnson paid Amgen $74.0 million resolving this matter.

Shareholder Litigation

On July 11, 2003, the King County Superior Court of Washington preliminarily approved the terms of the settlement that Immunex Corporation announced on
April 29, 2002.

Columbia Litigation

On June 18, 2003, Amgen and Immunex filed suit in the U.S. District Court
for the Central District of California against The Trustees of Columbia University seeking a declaratory judgment. In its complaint, Amgen and Immunex request a declaratory judgment that Columbias claims for royalties under license agreements
with Amgen and Immunex lack merit and that no royalties are owed. The complaint further seeks a declaratory judgment that Amgen and Immunex do not infringe Columbias recently issued U.S. Patent No. 6,455,275 and that the 275 patent is
invalid and unenforceable.

The three matters voted upon at the meeting were: (i) to elect four directors to a three year term of office expiring at the Annual Meeting of Stockholders in the year 2006
(Proposal One); (ii) to approve an amendment to the Companys Amended and Restated 1991 Equity Incentive Plan to permit certain performance-based stock awards to qualify for deductibility under Section 162(m) of the Internal Revenue
Code, as amended (Proposal Two); and (iii) to ratify the selection of Ernst & Young LLP as independent auditors of the Company for the year ending December 31, 2003 (Proposal Three). The stockholder proposal concerning
stock option grants to senior executives, which was included in the Companys 2003 Proxy Statement was not properly presented; therefore, the stockholder proposal was not placed before the meeting.

(i)

With respect to Proposal One, nominees Mr. Frederick W. Gluck received 1,102,333,718 shares voted in favor and 32,222,950 shares were withheld from voting, Mr. Franklin P. Johnson,
Jr. received 1,102,836,250 shares voted in favor and 31,720,418 shares were withheld from voting, Adm. J. Paul Reason received 1,102,274,228 shares in favor and 32,282,440 shares were withheld and Mr. Donald B. Rice received 1,097,277,233 shares
voted in favor and 37,279,435 shares were withheld from voting, and there were no abstentions or broker non-votes. All nominees were declared to have been elected as directors to hold office until the Annual Meeting of Stockholders in the year 2006.

(ii)

With respect to Proposal Two, 1,061,256,670 shares were voted in favor, 53,219,885 shares were voted against, 10,078,944 shares abstained from voting, and 1,129 were withheld from
voting as broker non-votes with respect to such proposal. Proposal Two was declared to have been approved.

(iii)

With respect to Proposal Three, 1,080,546,227 shares were voted in favor, 46,327,017 shares were voted against, 7,683,384 shares abstained from voting, and there were no broker
non-votes. Proposal Three was declared to have been approved.

(d)

Not applicable.

Item 5. Other Information

The Companys 2004 Annual Meeting of Stockholders will be held on May 13, 2004.

The Company filed one Current Report on Form 8-K for the three months ended June 30, 2003. The report dated April 29, 2003 contained the Companys
press release announcing its earnings for the three months ended March 31, 2003.

Certificate of Amendment of Restated Certificate of Incorporation. (17)

3.4

Certificate of Designations of Series A Junior Participating Preferred Stock. (20)

4.1

Indenture dated January 1, 1992 between the Company and Citibank N.A., as trustee. (3)

4.2

First Supplement to Indenture, dated February 26, 1997 between the Company and Citibank N.A., as trustee. (6)

4.3

Officers Certificate pursuant to Sections 2.1 and 2.3 of the Indenture, as supplemented, establishing a series of securities 8-1/8% Debentures due April 1, 2097.
(8)

4.4

8-1/8% Debentures due April 1, 2097. (8)

4.5

Form of stock certificate for the common stock, par value $.0001 of the Company. (9)

4.6

Officers Certificate pursuant to Sections 2.1 and 2.3 of the Indenture, dated as of January 1, 1992, as supplemented by the First supplemental Indenture, dated as of
February 26, 1997, each between the Company and Citibank, N.A., as Trustee, establishing a series of securities entitled 6.50% Notes Due December 1, 2007. (11)

4.7

6.50% Notes Due December 1, 2007 described in Exhibit 4.6. (11)

4.8

Corporate Commercial Paper - Master Note between and among Amgen Inc., as Issuer, Cede & Co., as nominee of The Depository Trust Company and Citibank, N.A. as Paying Agent.
(12)

4.9

Shareholders Rights Agreement dated as of December 16, 2001 by and among Amgen Inc., Wyeth (formerly American Home Products Corporation), MDP Holdings, Inc., and Lederle
Parenterals, Inc. (25)

4.10

Indenture, dated as of March 1, 2002, between Amgen Inc. and LaSalle Bank National Association. (27)

Credit Agreement, dated as of May 28, 1998, among Amgen Inc., the Borrowing Subsidiaries named therein, the Banks named therein, Citibank, N.A., as Issuing Bank, and Citicorp USA,
Inc., as Administrative Agent. (13)

10.22

G-CSF United States License Agreement dated June 1, 1987 (effective July 1, 1986) between Kirin-Amgen, Inc. and the Company. (20)